European Energy and NorSun a Bright Spot in Global VC Gloom


The fact that venture capital investing is down internationally isn’t a real shocker. But in a new Dow Jones VentureSource report, which says that outside the U.S. (Europe, Israel, China and India) VCs put out 50 percent less capital in the first quarter of 2009, there’s a Susan Boyle moment: In all that doom and gloom, Europe’s energy industry saw “investment actually increase.”

While venture investing overall in Europe dropped 35 percent in the first quarter (and numbers from other U.S.-focused venture capital reports are similar) investing in the energy and utility industries in Europe jumped up 82 percent to $289 million (€221 million). That was a boost from $159 million (€122 million) from the first quarter of 2008. The Dow Jones report touted the numbers, saying: “For the first time since 2005, we’ve seen the Europe region outpace the United States in terms of energy-related investment.”

But a big factor in that boost was a $192 million (€147 million) round of financing for Norwegian solar silicon ingot maker NorSun, which delivered well over 50 percent of the European energy total. Norsun’s funding round was so big it made Norway, which only brought in $12 million (€9 million) for the first quarter a year ago look like it’s the next VC hotspot. Yet without the NorSun deal, Norway had only another $5 million worth of deals for the quarter.

Whopping deals that skew the average always appear in these quarterly reports — in past quarters it’s been biodiesel maker Imperium Renewables, electric car infrastructure Better Place, or thin film solar makers Nanosolar and Solyndra. But in a rocky global investing quarter, this time the monster funding isn’t a risky early stage science experiment-type play; it’s a safe bet on a manufacturer making a standard product: silicon solar materials.

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